Correlation Between Ellington Financial and Ecc Cap

Can any of the company-specific risk be diversified away by investing in both Ellington Financial and Ecc Cap at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Ellington Financial and Ecc Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ellington Financial and Ecc Cap Corp, you can compare the effects of market volatilities on Ellington Financial and Ecc Cap and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Ellington Financial with a short position of Ecc Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ellington Financial and Ecc Cap.

Diversification Opportunities for Ellington Financial and Ecc Cap

0.53

Correlation Coefficient

Ellington Financial  Ecc Cap

Very weak diversification

The 3 months correlation between Ellington and Ecc is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ellington Financial and Ecc Cap Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecc Cap Corp and Ellington Financial is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Ellington Financial are associated (or correlated) with Ecc Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecc Cap Corp has no effect on the direction of Ellington Financial i.e., Ellington Financial and Ecc Cap go up and down completely randomly.

Pair Corralation between Ellington Financial and Ecc Cap

If you would invest  2.00  in Ecc Cap Corp on September 1, 2024 and sell it today you would earn a total of  0.00  from holding Ecc Cap Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.59%
Values	Daily Returns

Ellington Financial  vs.  Ecc Cap Corp

Ellington Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ellington Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Ellington Financial is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Ecc Cap Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ecc Cap Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Ecc Cap is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Ellington Financial and Ecc Cap

The main advantage of trading using opposite Ellington Financial and Ecc Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ellington Financial position performs unexpectedly, Ecc Cap can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Ecc Cap will offset losses from the drop in Ecc Cap's long position.

The idea behind Ellington Financial and Ecc Cap Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.